A statement issued on late Tuesday night by the company said that the proposed transaction is subject to shareholders' approval, creditor's approval, applicable regulatory approvals (including Competition Commission of India, SEBI, stock exchanges and National Company Law Tribunal (NCLT)) and other customary conditions precedent.

The company's board has also approved sale of its 20 per cent stake in SRL Limited (SRL) to Manipal Hospitals. "The resultant entity Manipal Hospitals will be a publicly traded company listed on NSE and BSE. The remaining FHL will be an investment holding company with 36.6 per cent stake in SRL," the statement said.

"As part of the proposed transaction, Dr. Ranjan Pai and TPG will invest RS 3,900 crore into Manipal Hospitals." The funds will be utilised by Manipal Hospitals to "finance the acquisition of 50.9 per cent stake in SRL (20.0 per cent from FHL and 30.9 per cent from other investors for which discussions are currently underway)".

In addition, the investment will be used to acquire hospital assets owned by RHT Health Trust and the growth of the hospitals and the diagnostics businesses. Once the acquitisition is completed, the combination of Manipal Hospitals and Fortis Hospitals will jointly emerge as the largest provider of healthcare services in India by revenue with 41 hospitals in India and 4 hospitals overseas.